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Promoting Private For-Profit Healthcare

India can ill-afford the neglect of the public healthcare sector.

The demand for right to health is being dealt with by the provision of health insurance in India. It is believed in official circles that universal healthcare can be provided merely through insurance coverage for hospitalisation. At the same time, the only thing that could ensure the provisioning of healthcare, particularly for the poor in this country—a functional public healthcare service—continues to be inadequately funded and, thus, systemically weakened. The finance minister, in the last full budget of the present government, made a pitch to focus on health. His tall talk about “Ayushman Bharat,” however, was not matched with any increase in budgetary allocations to the health sector. The budgetary allocation for the Ministry of Health and Family Welfare is at₹54,600 crore compared to last year’s expenditure of₹53,294 crore, an effective decline in real terms if one were to factor in expected inflation. These allocations are nowhere near the prescribed expenditure of at least 1% of gross domestic product (GDP) by the centre and 1.5% of GDP by the states for health. This is the minimum required for a country to provide essential health services, as has been pointed out by several government committees and councils, and prescribed in the National Health Policy 2017.

In keeping with his tall talk, the finance minister announced a “flagship” programme, the National Health Protection Scheme (NHPS), that he claimed would be the “world’s largest government-funded healthcare programme” for 10 crore poor and vulner­able families. This would provide publicly funded insurance coverage of₹5 lakh per family for hospitalisation. While the speech promises that “adequate” funds will be provided for its smooth implementation, this is not reflected in the budget documents. Even with a modest estimate of₹3,000 per household to be paid as premium per year, for a cover of₹5 lakh, the budget required would be₹30,000 crore. The existing healthcare insurance scheme, Rashtriya Swasthya Bima Yojana (RSBY), that provides an annual coverage of₹30,000 to poor families has been allocated only₹2,000 crore in the 2018–19 Union Budget. Later statements by officials from the health ministry, finance ministry, and Niti Aayog clearly show that there is a small likelihood that the NHPS will even take off this year.

For ensuring primary healthcare,₹1,200 crore has been allocated for 1.5 lakh health and wellness centres that would provide “compre­hensive health care,” including for non-communicable diseases, and maternal and child health services, as well as free essential drugs and diagnostic services. At₹80,000 per centre, one can imagine how inadequately funded this primary health service would be. Moreover, the budgetary allocation for the ­National Health Mission (NHM), of which the health and wellness centres will also be a part, is at₹30,634 crore, a reduction by₹658 crore when compared to the revised estimates of last year. The NHM includes many critical interventions to support and strengthen primary healthcare and is funded by the central government. A dilution of this would also mean going back on much of the progress made over the last 10 years through the National Rural Health Mission.

This continued neglect of healthcare is despite the severity of the health burden in the country, where more than one-third of children up to five years of age suffer from malnutrition and where the burden of non-communicable and infectious diseases has only grown. Several government policy documents have pointed to the growing incidence of huge out-of-pocket health expenditures leading families into utter financial distress bordering on penury. Health insurance, as studies have pointed out, does little to lessen the burden of out-of-pocket expenditure (OOPE) or to ensure proper healthcare for the poor. In India, 67% of all health expenditure remains OOPE and, of this, 63% accounts for outpatient treatment. Studies have also pointed out that under the existing RSBY, the proportion of hospitalisation cases that receive part or full reimbursement for their ­expenses is extremely low. Further, the accredited hospitals are often located in urban centres and the proportion of private hospitals in accredited hospitals far exceeds that of public hospitals.

With government policy and expenditures shifting towards insurance-based interventions, the allocations and focus on primary healthcare and public provisioning of health facilities are further neglected. That this benefits private players in the insurance market is reflected in the boom in insurance company stocks right after the budget announcements. The National Health Policy 2017 also talks of the emergence of a “robust health care industry estimated to be growing at double digit.” Dependence on the private sector, even for those who can ill-afford it, has happened on account of the neglect of the public healthcare sector. With the public healthcare centres suffering from poor infrastructure, under-staffing, and lack of equipment and medicines, even the poor have been left with no option but to turn to private healthcare. The existing healthcare system, based as it is largely on private for-profit provision, puts profits well above the health and well-being of the Indian people, and the proposed insurance scheme will only do more of the same.

Experience across the world shows that dependence on the private sector to meet the health needs of the people, in the absence of strong regulatory mechanisms and comprehensive public health services, does not yield equitable access to healthcare. In this context, India’s focus must be on strengthening public health systems at all levels by investing in better infrastructure as well as human resources. At the same time, progress also needs to be made on the regulation of the ever-growing private sector.

Updated On : 10th Feb, 2018


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